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The World Productivity And My Own

We live in some changing times. Everything is changing, every principle our world has been governed by is transforming. For the first time in our modern history, education stopped playing such a massive role in our societies. There is such a structural shift in everything that no one knows how to function properly. Our whole world has suffered a great shock and has yet to recover.

The Education Conundrum

Nowadays, (a good) education will not come with a good job. Not any more. Is there a place to talk about the demand and supply of educated people (workers) and the demand and supply of the labor market (work places)? Maybe, but it’s futile. It’s been said and done so many times however the change that we see comes from the natural world (aka supply and demand) and not by human intervention (laws, policies, subsidies etc).

There was a time when college specialization (the ability to choose to study towards becoming a doctor, a lawyer, a businessman, a painter, a social worker, an anthropologist, a professor etc) has been highly seen as our post-modern world’s greatest success. Everyone can study and be what they want and like and are good at. How wrong were we?

Now, I have said it many times during the past couple of years and nobody seems to listen: we are going back in time. Thanks to the emancipation (of everything, of the women, of the middle class, of the black people and more recently of the LGBT ones) in the 1900’s there has been a sudden and huge growth in the world economy. Everybody flourished and a lot of people have become richer with a constant growing middle class. But how and why? I’ll start with the why? Simply because due to advancing technology people have found out quite greatly how to use one’s resources for production and to fulfill people’s needs. Now the how? Another yet simple and baffling example: everyone has started to work for themselves and to grow an enterprise in their ‘own back yard’ (or quite close to it). I guess we’re now calling this business model a start-up. Say what? People had start-ups back then? No way! Way!! Starting companies with a couple of employees and with quite the dynamic growth – start-ups.

Interesting stuff here, don’t you say? If the markets are starting to create a 1900’s-like ecosystem for future growth why are the governments trying to deal with policies to mask a failed market 2010-like system? There’s no shame in trying to save the world. If by saving it we have to reassess and restructure our financial global architecture, then why don’t we do it? Are governments that narrow-minded or blind-sided? I don’t think so! Trust me when I say this, no matter where in the world, leaders know exactly what is happening in their country. The decision of not acting up and change something for the better is yet to be explained. But I have a theory. They lack courage. That’s it? Yes!They lack the courage that the entrepreneurs and businessmen have to recreate their business surroundings to better serve the society. But why you ask? To be honest I don’t know but I have a slight idea that it has something to do with their own jobs. In all fairness it is easier to reconstruct a company (be it large or small) than to reconstruct a whole country. So they may well lose their jobs, power and influence if they do something like this. Changes are not overnight. And people will rise against the ‘system’ in such a grand scheme. But why don’t they sacrifice their seats and take the risk to fulfill the purpose for which they have been elected? I mean, everyone that has had a start-up or has been at the helm of a larger company took some major risks and has put his own job at risk a lot of times. Without risk there is no growth after all.

The Productivity Hypothesis

But my title is saying something about productivity and I’ve been babbling about education and risk and change. Well let me put it this way: why has the USA grew so much during the last 150 years? Due to its increased productivity of course! Why has China increased so much economically recently? Due to its increased productivity of course! See where I’m going? At a macroeconomic level (i.e. global scale) we don’t really need to be talking about wealth but productivity.Productivity drives revenue. Revenue drives profits. Profits drive long-term investments that ultimately create wealth (this chain of events is of course not exhaustive but simply explanatory). Productivity is, simply put, a measure of the efficiency of production. How much can we produce for less. It’s quite marvelous if you ask me: we possess the ability to produce an increasing quantity of goods while keeping constant or even reducing the inputs. The beauty here is that we, as a society, can serve our needs better without any additional resources and costs.

In our time, in the Computer Age and the days of automation, industrial robots are started to be used more and more. This is why China is quite productive in these terms as it has been declared the country with the largest import of industrial robots. However these require some hefty capital to implement whereas the jobs they are replacing are mostly minimum-wage jobs and most of them are still there due to their cheapness. So I beg the question, keeping this in mind, should governments implement policies to raise the minimum wage, risking their citizens’ jobs or should they keep them as they are or even lower them (thus letting the people keep their jobs and be more desirable financially than the robots?).This is truly a million dollar question and a billion dollar policy if it is to be developed: lose money and keep people or lose people and keep money?

Shifting the focus on wealth to the focus on productivity, I think it is quite clear that China is a dominating factor in the global economy. But will an never-ending growth for the Chinese be positive? No, definitely not! Accumulating major productivity centers inside China will render the USA, the EU, Russia, India and everybody else on a fast decreasing productivity line. It is the same with the wealth discussion: inequality in productivity is not profitable on long term for the global environment. And need I say that this type of inequality coupled with the wealth one will be somewhat disastrous?

Robots (i.e. automatic production) will indeed take some jobs and this number might increase quite drastically in the near future, but that does come as a synonymous with more people being better off or worse off. It all comes to how the newly created capital and wealth is distributed. Ta-da!!! Productivity is still linked to wealth. Well, of course it is! But it’s even greatly linked to its distribution. The key take-away of this entire article is the need of a thorough analysis of the economics of redistribution (this will be covered in a later article all on its own).

To put things into perspective, technology has indeed created something wonderful in our societies, it has increased productivity while cutting labor costs. But, unfortunately, this has been done at the expense of a far more inequitable economy.

A More Productive Education

Now, to link the two theories, the education conundrum and the productivity hypothesis, I have a simple answer to all educational state systems. Why not make the output of the educational system (i.e. students, pupils) more productive labor inputs? If you find this sentence quite hard to grasp I can put it another way: simply make students more productive by tailoring the educational systems to the labor market and not vice-versa or, even worse, leave then uncorrelated. A good option is to simply specialize children and young adults earlier in their academic training. Nowadays you do this in college, but even then you are being thrown at bullshit courses with no practical value. If you think about it, it’s quite sensible this idea: it’s preposterous for a student to be in school for more than 15 years (excluding post-graduate education) and be able to learn what he really likes or is good at in his last couple of years. I am not saying take maths, literature, history and sciences out of the schools’ curriculum but reconsider their architecture.The problem is not people not having enough education it’s having not enough marketable education and skills (for example I have never learned how to pay a tax in school yet I have a career in finance nor how to eat right while working long hours yet I self-cook). In other words the problem is not the quantity of the education but the quality!

A pretty interesting article wrote by Danny Crichton has the author postulating that “computers have simply evolved faster than our education system over the past few decades, and our race for education is falling behind’. Personally I think it’s an extreme statement but nonetheless less further from the truth. If our governments will not prepare us for the future, rest assured the machines which will be quite prepared to embrace new challenges, will increase in value and profitability. Again, the key is the market structure and its economics of distribution and redistribution!

A Bit of a Productive Self-Awareness

Even on a personal level I have found myself in a productive rut. I have graduated from a high-school majoring in sciences, I spoke almost perfect English since very little, I graduated from a global top 30 UK university in Finance and Economics and have worked since my graduation and yet I still think I do not posses a quarter of the necessary qualities that I need to be as successful as I want to be.

And that is why, I have decided I will enroll in French classes and I WANT TO LEARN HOW TO CODE(due to my limited free time, they will be online and based mostly on self-learning). I have already started my French lessons and already thinking I should sit a DELF examination. Not for the diploma per se but to set myself a tangible objective and time frame until when I need to have my French skills sorted out. And my favorite new educational hobby is that I have started writing code in Ruby. It’s so fun. Maybe in the near future I will have one of those tech jobs writing important pieces of code. Well, who knows? But there’s one thing I am certain about and that is: I will become more productive and the more I know the more I will be able to control and improve.

If you have experiences of your own on how to increase your educational productivity please tell the whole world in the comments below.